20010305Danielson.doc

March 5, 2001

The Honorable Judi Danielson
Idaho State Senate
PO Box 528
Council, ID 83612-0528

RE: Emmett Cogeneration Facility

Dear Senator Danielson:

Regarding your inquiry about the 14 megawatt (MW) cogeneration facility in Emmett, please be advised that the Emmett facility is a qualified facility (QF) under the federal Public Utility Regulatory Policies Act of 1978 (PURPA). The underlying 20-year purchase/sale contract between Idaho Power Company and the Emmett Power Company (Boise Cascade) was approved by the Commission in 1989. The on-line date for the facility was May 30, 1985. Because payments to the QF under the contract are levelized, termination prior to contract-end results in overpayment. It is the Commission’s understanding, based on conversations with Idaho Power, that the utility and Boise Cascade are negotiating the terms of contract termination. Pursuant to contract, the liquidated damages for termination today are approximately $4 million. Please feel free to contact this office if you need additional information.

Sincerely yours,

Ron Law
Executive Administrator

bls/L:danielson_sw